Text Messages Can Make You Save More Money

By Ben PopkenNovember 9, 2009

Could a text message make you save more?

A new study says yes.

American researchers conducting a study overseas teamed up with banks to send text messages to consumers to remind them to save. There was a 16% increase in savings account balances by the cohort that got messages pointing out how the bank offered specific incentives for consistent deposits.

However, the messages that pointed out the bad things that could happen if you don’t save money did not affect the amount of money saved.

This could be a good strategy for US banks looking to shore up deposits (provided the service was opt-in, of course). Another idea is that you could program some self-help messages, personal finance or otherwise, into some kind of automated online text message service to help you reach your goals. I would probably use the calendar function on my phone because it pushes meeting reminders to the front of my phone.

What messages would you send yourself? What service would you use to do it?

Or…. banks could raise savings (or short term CD) rates to the point where they actually beat inflation.

Want people’s money? Make it attractive for potential and current clients to give it to you. Where’s the competition for attractive rates? Just looking at bankrate.com, seems like it’s a race to the bottom, not any sort of “market” to speak of in regards to good rates.

A text message asking me to put my money into an account making 0.25% isn’t going to do crap. Move that decimal over, and I’ll on it. My money (and everyone else’s) flows quite easily in the direction of nice returns.

@SPENCERG: See, this is a great idea. Im going to build a website that can schedule texts messages to be sent at a specific time, so I can remind drunk xtc46 not to go to the beach at 3am next saturday

@xtc46 – thinksmarter on twitter: it’s called google calendar and you put the email address for your phone into the email slot.
i do this for doctor’s appointments which have to be scheduled 3 months in advance.

Bank account texting is pretty nifty. I have a homemade Excel register and bump it up against my “transactions over $1.00″ texts every morning. It is a lot more portable and I can also keep better track of the little charges that would be forgotten about.

Interesting. That sounds similar to a study that looked at helping people lose weight. They found that a simple email reminder or phone call during the week helped people stay on track with their food/exercise goals.

As to the text messages; while I don’t need any reminder to save money I do see it as something positive if it helps people.

Many people need support and motivation in various ways. When I first started jogging many years ago I found out that if I had a partner to jog with it made it easier to get up early and do what had to be done.

When I consider how many people have been helped by the various support groups available I look at the text messages as just another type of support.

@FatLynn: “Like what? I am really curious about this, because I always have money on the brain and can’t imagine a text message changing my habits.”

You are making the classic statistical mistake of thinking that a change of 16% in a group of people translates into you are 16% more likely to change.

Additionally, it does not say that 16% of the cohort did anything, only that the savings rate increased by 16%. This could have happened if one or two people increased their savings rates by very large percentages during the study. We don’t know how large the cohorts were, what the initial savings rates were, how many people accounted for what percentage of change, etc.

It may just be that people who are not you are motivated by these things.